THE ROLE OF THE EUROPEAN FUNDING IN THE CONTEXT OF THE ECONOMIC CRISIS

Corina Miculescu
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Corina Miculescu: „Dimitrie Cantemir” Christian University Bucharest,Faculty of Management in Tourism and Commerce

SEA - Practical Application of Science, 2013, issue 1, 106-113

Abstract: In the context of present day economy characterized by continuous change, enterprises are forced to make a series of modernizations in order to improve technology, to access various market niches, to satisfy clients’ demands. Consequently, enterprises invest annually substantial financial capital in fixed assets. These investments influence the situation of a firm over many years. A good decision may lead to a tremendous rise in profit and, as a consequence, to an increase in share price on the market. However, a bad decision may lead to bankruptcy. Thus, making decisions in the process of budget allocation, cost control and realist forecasting is vital for the future of an enterprise. Establishing investment budgets implies engaging funds in projects that will determine generating and increasing cash flow, estimated over a longer period of time. The essence of a good process of establishing a budget is to estimate correctly the cash inflows generated by the project. Thus, the present paper analyses the basic principles of deciding on investment budgets, the modalities of estimating cash flows, making decisions for development and making decisions for replacement within investment processes.

Keywords: Cash flow; Investment project; Budget; Net cash flow; Opportunity cost; Accounting net income (search for similar items in EconPapers)
JEL-codes: G00 G11 M10 M20 M21 (search for similar items in EconPapers)
Date: 2013
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